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GILT AUCTION PREVIEW: 4.25% Jul-34 gilt

GILT AUCTION PREVIEW
CEEMEABulletUKMarketsFixed Income Bullets
  • The DMO will return to the market this morning with GBP4.00bln of the 10-year 4.25% Jul-34 gilt on offer.
  • The GBP4.00bln nominal size is a bit larger than the other GBP3.75bln auctions of this gilt since its launch.
  • We have seen reasonably wide tails for this gilt which have ranged from 0.8-1.3bp and averaged over 1.0bp (when excluding the launch auction).
  • Given the recent volatility and slightly larger auction size there is scope for another relatively wide tail at today’s auction. Given recent moves this has a higher-than-usual potential to spook the market.
  • However, demand may be boosted a little as this is  the last auction of the 4.25% Jul-34 gilt ahead of the syndicated launch of a new 10-year gilt in February (we pencil in 11 February) – that new gilt will be reopened via auction on 12 March via auction.
  • Timing: Results will be available shortly after the auction window closes at 10:00GMT with a further GBP1.0bln available to successful bidders through the PAOF.
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  • The DMO will return to the market this morning with GBP4.00bln of the 10-year 4.25% Jul-34 gilt on offer.
  • The GBP4.00bln nominal size is a bit larger than the other GBP3.75bln auctions of this gilt since its launch.
  • We have seen reasonably wide tails for this gilt which have ranged from 0.8-1.3bp and averaged over 1.0bp (when excluding the launch auction).
  • Given the recent volatility and slightly larger auction size there is scope for another relatively wide tail at today’s auction. Given recent moves this has a higher-than-usual potential to spook the market.
  • However, demand may be boosted a little as this is  the last auction of the 4.25% Jul-34 gilt ahead of the syndicated launch of a new 10-year gilt in February (we pencil in 11 February) – that new gilt will be reopened via auction on 12 March via auction.
  • Timing: Results will be available shortly after the auction window closes at 10:00GMT with a further GBP1.0bln available to successful bidders through the PAOF.